In all likelihood you are part of an associational system in some aspect of your life.

WAIT!  Don't stop reading!

All that this statement means is that your business, your congregation, your family, your involvement in a civic organization, your participation with some sort of home-based business, and your membership most anywhere places you in units of a larger whole that somehow has to work together.  Do you know what matters?

We are the most familiar with franchises, with roots that go back to Benjamin Franklin's print shops, but religious communities, trade associations and guilds of certain professions are far more ancient -- almost to the dawn of civilization.

Few scholars have studied associational systems because they are impossibly hard to lasso. Monolithic single or stockholder companies are much easier to observe and measure. And yet, associational systems are far more prolific and richly diverse.

They are also difficult to govern because the power base in an associational system is spread out among all the players. Perhaps the most evident way to observe this spread out power dynamic is what many call the double-bottom line. 

If it is franchising we are talking about, the corporation that issues the franchise and the franchisee that operates one of the franchises are businesses that got hitched at the altar, pledging to do their work in concert with each other. Each has a bottom line of profitability that must be managed, hence the phrase "double-bottom" line. 

I would argue that there is a triple bottom line, and it is the third line that is the most important. The third line is what the whole of the franchised arrangement produces. The mutual benefit for the whole of the system. One player benefitting while the other languishes is not of long-term benefit to anyone.

In my experience, few associations track economic information for this third line. Fewer still make strategic decisions based upon it. Most protect themselves ahead of their partner, and usually to the harm of their business relationship. Self-interest is what brings them together and self-interest is what harms the relationship because they aren't tracking or strategizing for the joint benefit of the whole.

Astute observers will notice that conflicts between players in associational/franchised/licensed organizations often make news headlines. For example, today's headlines tell us about EuroDisney's economic difficulties in paying hefty licensing fees.

More about this in my next post.

-mark l vincent


Wise Owl & Young Buck

Mark L. Vincent
Post by Mark L. Vincent
February 2, 2015
I walk alongside leaders, listening to understand their challenges, and helping them lead healthy organizations that flourish.